Seattle Trademark Lawyer

The Western District today entered its Findings of Fact and Conclusions of Law in the Lahoti v. Vericheck, Inc., cybersquatting case. As STL discussed here, plaintiff David Lahoti filed a declaratory judgment action challenging the National Arbitration Forum’s UDRP order that his domain name, vericheck.com, be transferred to Vericheck, and finding that his registration does not violate the Anti-Cybersquatting Consumer Protection Act. Vericheck counterclaimed for cybersquatting, trademark infringement, and violation of Washington’s Consumer Protection Act.

In August, Judge James Robart found on summary judgment that Mr. Lahoti had registered and used vericheck.com in bad faith; that he was not entitled to the ACPA’s “safe harbor” provision; that vericheck.com and VERICHECK are identical or confusingly similar; and that Vericheck’s use of the mark predated Mr. Lahoti’s registration of the domain name.

In November, the parties had a two-day bench trial on the distinctiveness of VERICHECK and the likelihood of consumer confusion caused by Mr. Lahoti’s use of the mark. Given the court’s findings on summary judgment, the parties agreed that the court could determine statutory damages and attorney’s fees without need for trial testimony.

On Vericheck’s cybersquatting counterclaim, the court concluded:

“[T] court finds the VERICHECK mark to be suggestive and, therefore, inherently distinctive. The mark’s strength in the marketplace is amply supported by Vericheck’s long use of the mark; the mark’s promotion through advertising, trade shows, and promotional incentives; and the expansion of Vericheck’s territory and client list along with an increase in sales. Because Vericheck has already satisfied the other elements under the ACPA, the court grants judgment in favor of Vericheck on its ACPA counterclaim.”

The court similarly granted judgment in favor of Vericheck’s infringement and Consumer Protection Act counterclaims for many of the same reasons, namely, “the VERICHECK mark is strong and inherently distinctive and Mr. Lahoti intentionally infringed the VERICHECK mark by his registration and use of the <vericheck.com> domain name, which confused and diverted Vericheck’s customers.”

To remedy these harms, the court found Vericheck was entitled to an injunction against Mr. Lahoti “prohibiting him and his affiliates from using the term VERICHECK in any manner, including as a domain name, and requiring him to transfer the <vericheck.com> domain name to Vericheck.”

It also awarded Vericheck $100,000, the maximum amount of statutory damages for cybersquatting, based on “Mr. Lahoti’s bad faith and his deliberate and knowing acts, his pattern and practice of registering domain names that incorporate the trademarks of others, his efforts to extort thousands of dollars in exchange for transfer of the Domain Name, his disregard for the submission of inaccurate answers to interrogatories, and the actual confusion which is occurring in the marketplace….”

For these same reasons, the court found the case qualified as “exceptional” and awarded Vericheck its reasonable attorney’s fees under the Lanham Act.

The case cite is Lahoti v. Vericheck, Inc., No. 06-1132 (W.D. Wash.).